M&S rejects Greens' Takeover bid

The British Financial Services Authority said today it was taking no action against Stuart Rose following an inquiry into share dealings made by the Marks & Spencer boss.

Meanwhile, tycoon Philip Green suffered a major setback earlier today in his bid to land Marks & Spencer today when his £9.1bn (€13.6bn) approach was rejected by the retailer.

The entrepreneur saw his “final proposal” of 400p per share dismissed by M&S directors for significantly undervaluing the group and its prospects – the third occasion that the retailer has rebuffed the Bhs and Arcadia owner.

Mr Green was considering his next move this afternoon and has until August 6 to make a formal offer or walk away. He is thought to be in talks with shareholders ahead of a key strategy presentation by M&S on Monday.

Analysts said the battle for control of the retailer was not over, even though Mr Green has vowed only to make a formal bid with the support of the M&S board.

Today M&S pledged to show its real worth next Monday when chief executive Stuart Rose outlines his vision of how to improve its trading performance.

New information would be presented to shareholders who would then “be able to make an informed assessment of the board’s view”, the company said.

This is expected to include more than £100m (€150m) of savings from the supply chain, a revaluation of M&S property and initiatives to drive like-for-like sales.

The importance of the strategic review in deciding the outcome of the takeover saga was underlined by only a 2% fall in M&S shares today.

Retail analyst Rhys Williams, of stockbrokers Seymour Pierce, said the response of investors will be crucial.

“We believe 400p is a pretty decent price for this business. M&S will have to come out with all the stops to show why it didn’t recommend this offer,” he said.

Mr Green has secured the support of US-based Brandes – the largest investor in M&S with an 11.7% stake – for his proposal.

And the Bhs and Arcadia owner revealed today that investment bank Schroders, which has a 1.2% interest, has agreed to sell its shares if he can win a recommendation from the M&S board.

But a statement from M&S raised concerns at “a number of major areas of uncertainty” which needed to be clarified by Mr Green.

He had not explained how he would tackle competition issues if his bid was successful, the company said.

Concerns were raised by the M&S board at the financing and ownership structure of bid vehicle Revival Acquisitions, while it sought more details on the due diligence that Mr Green wishes to carry out in partnership with his team.

M&S also wanted an explanation of “the assumptions” made by Revival when urging the retailer to open its books, including issues relating to its pension fund.

Mr Green was today refused a meeting with the trustees of the fund, which has a £670 million deficit according to the latest annual report and accounts of M&S.

He is anxious to know whether M&S agreed a future funding plan when it injected £400 million into the fund earlier this year.